M-KOPA closed a $75m drive back in February 2022. Today, the lender, which also offers other fintech-based services has supplemented its finances with a fund led by Standard Bank Group and has plans to venture into additional markets, among other new and interesting propositions.
Digital financing firm M-KOPA has announced it has closed more than $250 million in debt and equity financing. The funds, according to the company, will be used to boost its fintech-based operation in new markets, particularly across Sub-Saharan Africa. M-KOPA, which closed a similar deal back in February 2022 valued at $75 million, has revealed that the round is one of the largest not just for the company, but also in the African tech sector.
Standard Bank Group, M-KOPA’s strategic partner, arranged over $200m in sustainability-linked debt financing. Other lenders include IFC, Lion’s Head Global Partners, FMO, British International Investment, Mirova SunFunder, and Nithio. Sumitomo Corporation, an existing investor, contributed $36.5m in equity investment. Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude also participated in the round.
M-KOPA has found success in the Kenyan market following the launch of its solar-powered solutions for local households. At the beginning of its operations, the firm connected homes with solar systems, which included panels, batteries, LED lights, and charging stations for mobile devices. The selling point of the service was its ability to gainfully replace paraffin lamps with clean lighting and power sources for off-grid homes.
All these services, which have since been improved over the years with more products such as access to TV services, are offered through M-KOPA’s pay-as-you-go model that allows users to make affordable instalments using mobile money (M-PESA). Customers can, for instance, pay as little as KES 100 (under $1) per day to keep their lights on.
M-KOPA says it has sold over 3 million of these products through its sales model that has an agent network of over 10,000. This means it has sold a million more assets in more than one year. With more than $1 billion in cumulative credit provided to underbanked customers in Africa, M-KOPA has been a success story in East Africa. It expanded to Nigeria in 2021, with a more recent footprint in Ghana. According to the firm, it recorded an 85% compound annual growth rate in new customer acquisition from 2020 to 2022.
Fueled by new funding M-KOPA plans to boost its smartphone financing offering, expand into additional markets, and prioritize sustainability.
It is also committed to driving women’s financial inclusion and developing eco-friendly electric mobility solutions in the East Africa market.
What they said
Speaking on the round, Jesse Moore, M-KOPA CEO and Co-founder said, “At M-KOPA, we are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers, and are proud of the thousands of local jobs we’ve created during tough economic times. As we continue to scale we remain committed to building a sustainable business and closing economic and digital gender gaps. We are delighted to have the support of new and existing investors who share our vision and mission.”
“Supporting M-KOPA is in line with our purpose of driving sustainable growth for Africa and her people. Financial inclusion not only enables economic growth, it also accelerates it. M-KOPA has, in a short time, managed to positively impact so many lives by enabling access to power and smartphone connectivity, which are a vital part of enabling the economic empowerment of all.” added Nick Riley, Corporate Financing Solutions at Standard Bank